KARACHI: The rupee is likely to stay under pressure next week due to bulkexternal payments and expected rise in the international oil prices.
The rupee ended the week with a record low of Rs174 against the dollar. Thelocal currency fell Rs2.82, or 1.65 per cent, during the outgoing week. Theexchange rate ended at Rs171.18 on October 15, 2021 to close the week atRs174.
The rupee/dollar parity remained volatile since the start of the currentfiscal year. The local unit lost value of Rs16.46, or 10.45 per cent, fromRs157.54 on June 30, 2021 to the closing of Rs174 on October 22, 2021.
The local currency may come under pressure next week, owing to the recentrepayment of $1.646 billion by the State Bank of Pakistan (SBP). Theofficial foreign exchange reserves of the State Bank recorded a decline of$1.646 billion to $17.492 billion by the week ended October 15, 2021,compared with $19.138 billion by the week ended October 8, 2021.
The State Bank of Pakistan attributed the decline in the foreign exchangereserves to external debt repayments, including the repayment of $1 billionagainst Pakistan International Sukuk.
The import bill of the country recorded an increase of 66.11 per centduring the first quarter (July–September) 2021. The country has spentforeign exchange worth $18.75 billion during the first quarter of thecurrent fiscal year, compared with $11.28 billion in the correspondingquarter of the last fiscal year.
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The oil import bill is the major reason for the massive depreciation in thelocal currency. The oil import bill registered a phenomenal growth of 97per cent to $4.59 billion during the first quarter of the current fiscalyear, compared with $2.33 billion in the corresponding quarter of the lastfiscal year.
Reports are suggesting that the international oil prices may rise infuture. Some are forecasting the oil at $100/barrel in the coming days.
The surge in import bill has also significantly widened the current accountdeficit.
